BoI eager to dull minimum tax pain

The Board of Investment (BoI) is planning to launch measures to ease the sting for multinational investors based on a new government tax planned for foreigners.
Under a new law being drafted by the Revenue Department, individuals residing in Thailand for 180 days or more must pay personal income tax on overseas earnings, regardless of whether that income is brought into Thailand.
The department said earlier the law aims to set a minimum tax rate.
The tax aligns with the principle of a global minimum tax (GMT), ensuring large multinational corporations pay a minimum tax rate of 15% worldwide in the countries where they operate.
“We expect the tax to affect foreign investors who expand their businesses into Thailand, so we need measures to deal with the impact,” said Narit Therdsteerasukdi, secretary-general of the BoI.
Thailand has attracted many foreign companies to invest in a variety of industries, including electric vehicles.
Mr Narit said he expects entrepreneurs from 1,000 multinational companies to be affected by the tax.
He did not elaborate on the measures the BoI plans to implement, but said the board is talking with the Finance Ministry and other state agencies on the new tax.
The tax is expected to be imposed by the government next year, so the BoI needs to speed up work on developing the relief measures, said Mr Narit.
“Many countries have already imposed a GMT. This will affect investment plans and projections of multinational companies,” he said.
Thailand needs to set a minimum tax rate, following international agreements led by the Organisation for Economic Co-operation and Development (OECD).
The Revenue Department said earlier the collection of this tax will depend on international cooperation and information exchange, as Thailand is a member of the OECD for tax information exchange among countries.
The BoI offers investment incentive packages to help the government draw foreign investment here, in an effort to improve the country’s economy.
Executives from the US and China are among the key foreign investors in Thailand.
From January to September this year, Singapore was the top source of foreign direct investment with applications worth 181 billion baht, more than double the 79.7 billion baht in the same period of 2023, mostly attributed to large investments in electrical appliances, electronics and data centres by units of Chinese and American firms.
China ranked second with 114 billion baht, up 18% from 96.5 billion a year earlier, followed by Hong Kong at 68.2 billion, Taiwan 44.6 billion and Japan 35.5 billion.